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| Customers purchase fruits imported from
Thailand at a supermarket in Nanjing. (China
Daily) | The trade of agricultural produce
between China and her ASEAN
neighbours has benefitted from an early-harvest programme that was
put in place earlier this
year.
The success of the tariff-cutting programme, which some
dubbed as "a trial move," will be conducive to the eventual realization of
a free trade area (FTA) between China and the Association of Southeast
Asian Nations (ASEAN), potentially creating the world's largest FTA,
analysts say.
According to General Administration of Customs, China imported a total
of US$330 million worth of fruits and vegetables from ASEAN countries in
the first half of the year, reflecting an increase of 38.7 per cent year-on-year.
During the same period, China's exports stood at US$270 million,
jumping by 33.9 per cent.
The sharp growth should be attributed to the launch of the
early-harvest programme, which is part of the FTA framework agreement
signed by China and the ASEAN in 2002, said Fan Ying, a professor at China
Foreign Affairs University.
Under the programme, which was implemented on January 1, the two sides
have cut tariffs on about 600 agricultural imports between 2 and 15 per
cent, and agreed to scrap
these tariffs in 2006.
Thailand has taken the lead among the ASEAN members in initiating this
free trade accord as it has phased
out all taxes on 188 fruits and vegetables with China
starting last October.
This bold move has resulted in great benefits.
The country's exports of fruits and vegetables to China increased more
than 30 per cent to stand at US$210 million from January to June,
accounting for 64 per cent of ASEAN's total exports.
"Judging from the figures, the programme is a win-win deal for the two
sides," Fan said.
The robust trade increases also benefit consumers on both sides, as
they witnessed a fall in prices on the fruit market.
Prices of some tropical
fruits imported from Thailand decreased by 50 per cent in Beijing,
compared with last year.
Also, Chinese pears and apples are being sold at much lower prices in
Thailand, sources said.
"Their prices dropped by 40 to 50 per cent," said a Chinese retailer
who has business in Thailand.
In addition, the programme helps eliminate smuggling of fruits and
vegetables across the China-ASEAN borders.
With the zero-tariff
programme in place, smuggling of fruits and vegetables
will be impeded, Fan said.
In a larger picture, Fan said, the early-harvest programme boosted the
confidence for both China and ASEAN nations in establishing the FTA as
scheduled.
China and AESAN are complementary with each other in terms of the trade
of fruits and vegetables, Fan said.
ASEAN members export tropical fruits and vegetables to China and
imports temperate ones.
"They don't compete with each other," she said. "This is also the
reason why the two sides decided to begin the FTA construction by
eliminating tariffs on agricultural imports."
The programme is successfully fulfilling its role as a trial move, she
said.
"The early-harvest success demonstrates that the FTA will also be a
win-win deal for both sides," she said, adding a good beginning increases
the likelihood of ultimate success.
"It also soothed some earlier worries that China will be the major
beneficiary of the agreement," she said.
Fan also believes the experience and lessons we learned from the
early-harvest programme will help the two sides better carry out the FTA
schedule on industrial co-operation and investment facilitation.
The ASEAN nations also pin high hopes on the FTA proceeding, currently
represented by the early-harvest programme.
Indonesia expects that its exports to China will soar to US$5.8 billion
in 2007 from US$2.9 billion in 2003.
China and the ASEAN have agreed to establish a FTA in 2010, the world's
largest with a coverage of 1.7 billion consumers and a combined gross
domestic product of US$2 trillion.
However, experts cautioned that setbacks may arise in the future, when
the two sides begin eliminating and reducing the duties of industrial
imports. "By contrast, agreements will be easier in the agricultural
produce market, as the two parties are complementary in the agricultural
sector," Fan said. "But in some industrial sectors, they compete with each other and thus problems may
occur."
(China Daily) | 
Updated: 2004-08-09 09:42